Hilton chain expands presence in Brazil despite the pandemic

Amidst the celebration of its 200th hotel in the Caribbean and Latin America region – one more in Cancún, one of the main destinations in Mexico -, the Hilton hotel chain, which has 7,000 units globally, managed to swim against the tide and make a leap in the pandemic, a moment when the tourism sector around the world was struggling against the crash.

In the case of the company, growth occurred when identifying the fragility of smaller or independent networks. Thus, Hilton managed to accelerate its growth, through the conversion of hotels to its brands, with the adoption of franchises.

In Brazil, the chain currently has 16 hotels in operation, six of which are owned and the rest in the franchise model. To continue its expansion program, there are already ten more hotels that will be launched in the short term, via franchises or own management. Two will open their doors later this year.

In the last five years, according to data presented by the director of development of the company in Brazil, Leonardo Lido, the network has tripled in size in Brazil. “This has been a strategy that has been shown to be consistent”, says the executive.

Since the beginning of 2020, the company has opened eight hotels in Brazil, doubling its position during the pandemic period alone. The expansion move proved successful as tourism began to return. With its 16 hotels, the network is still small in the country. Accor, the leader here, has 336 hotels in the country, including brands such as Ibis (most popular) and Sofitel (luxury).

way out of suffocation

Lido comments that, at the beginning of the pandemic, many owners of smaller chains, or even independent hotels, financially strangled, began to seek a solution for the business, with partnerships being a possible way out.

“Our franchise structure is very well consolidated”, comments the executive. For the Hilton, the compensation is given by the payment of royalties and a share in the venture’s revenues.

How is the alliance

For the hotel owner, who decides on the franchise model, the advantages, according to the Hilton executive, are in the synergy gain, with the group’s scale, use of the chain’s team, marketing, in addition to the use of a strong brand and being part of a loyalty program, something that today is at the root of the retention strategy of large hotel chains.

This does not mean that the converted network will be standardized. The look will be done on a case-by-case basis. When the intervention to be made by Hilton is small and there is little to change in style, for example, the name of the hotel itself can be kept, but with the last name “by Hilton”.

Created in 1917, the hotel chain was sold by the Hilton family in 2017 to the private equity fund (which buys stakes in companies) Blackstone, in a deal worth US$ 26 billion.